Research On The Compensation Of Traffic BOT Project Of Early Termination Based On The Game Theory Model Building

BOT (build-operate-transfer) is an innovative financing and operating mode in the construction of infrastructures and public utilities via collaboration between the public sector (government) and the private sector (project company). In recent years, with the speeding up of China’s urbanization, the demands of public infrastructures increase continually. However, the government usually faces budget crises, which has been a significant issue for the construction of transport infrastructure. BOT mode which can solve this issue therefore is widely used in China. As the imperfect related legal and policy, BOT projects revealed many problems in practice, such as the occurrence of early termination in some cases. How and what principles, bases, methods to use, and how to share the responsibilities and the compensation, has become a crucial topic for both the government and the project company.Firstly, the study collected and filed correlational researches of the early termination in BOT projects, and then provided a literature review. The study also illustrated the conceptual framework of BOT mode, and explained the early termination of BOT projects. On this basis, it summarized the views of worldwide scholars on the responsibility sharing and compensation determination of early termination.Secondly, the study introduced the related concepts of bargaining game model and Nash equilibrium, and proved the applicability of these analysis methods on responsibility sharing and compensation determination of the early termination in transport BOT project, and under the condition perfect information, presented the basic assumption of bargaining game between the government and the private sector (project company), and constructed a game model of early termination with shared responsibility. On this fundamental, it used Nash equilibrium to get the solution, and then the game model and its solution were discussed.Finally, the early termination of a transport BOT project was taken as an example, to validate the general applicability of the constructed model. Then the study utilized the model to solve the case, and gained the Nash equilibrium.In this way, the study proved that relative compensation between the government and private sector, which is the compensation, is applicable for this model, so as to verify the feasibility of the model.